A doctor owns 100% of his own medical practice. He also owns 100% of a business in a non-medical field. Does this constitute a controlled group?

Thanks for any responses.

Yes.

The fact that the two businesses are not in the same field (i.e. medical practice and sells car batteries) does not make a difference.... he "controls" both companies by virture of his percentage of ownership.

I agree. Now suppose the medical practice, consisting solely of the doctor, has adopted a profit sharing plan. I would think that the non-medical company would have to adopt the plan as well, and cover the employees that meet the eligibility requirements. Is that a correct assumption?

Thanks again.

Not necessarily. You have to include them for nondiscrimination testing purposes. Suppose the medical company has 15 employees, all of whom are covered. If the nonmedical company has only 5 employees, then they could be excluded and you'd still pass your 70% test.

Of course, in real life the situation is usually exaclty the opposite. They want to cover the business with the owner and spouse, and exclude everyone else!

- no way that flys unless the other group has some sort of qualified plan, and even then, you would need to prove that you weren't discriminating.

I didn't focus on the words "consisting solely of the doctor." I was thinking more in general terms, as you can see by my example. So I agree with Effen!